24/7 Wall St. » The Week

The Top Earnings Previews For The Week Ahead (TECD, URBN, AZO, BBY, DELL, PETM, RL, BIG, HPQ, NTAP, P, TOL, COST, TIF, PAY)

Administrator — Fri, 18 May 2012 14:09:16 +0000

24/7 Wall St. has compiled earnings previews for some of the top companies reporting in the week ahead. Estimates have been taken from Thomson Reuters for consensus earnings and targets and we have added in color on some companies if applicable.

These are some of the focus companies reporting earnings in the coming week: Tech Data Corporation (NASDAQ: TECD); Urban Outfitters Inc. (NASDAQ: URBN); Autozone Inc. (NYSE: AZO); Best Buy Co. Inc. (NYSE: BBY); Dell Inc. (NASDAQ: DELL); PetSmart Inc. (NASDAQ: PETM); Ralph Lauren Corporation (NYSE: RL); Big Lots Inc. (NYSE: BIG); Hewlett-Packard Co. (NYSE: HPQ); NetApp Inc. (NASDAQ: NTAP); Pandora Media Inc. (NYSE: P); Toll Brothers Inc. (NYSE: TOL); Costco Wholesale Corporation (NASDAQ: COST); Tiffany & Co. (NYSE: TIF); and VeriFone Systems Inc. (NYSE: PAY).

MONDAY, MAY 21

Tech Data Corporation (NASDAQ: TECD) is set to report and show how the outlook is for the companies which actually distribute all of the technology components and finished smartphones and consumer electronics devices around the world. Shares were recently under $48 and the 52-week range is $38.21 to $59.29. The consensus estimate is $1.16 EPS and $6.18 billion in revenue.

Urban Outfitters Inc. (NASDAQ: URBN) is going to show if its turnaround is closer or just still chugging along. Estimates are $0.20 EPS and $579.2 million in revenue. Shares were recently around $25.50 and the 52-week range is $21.47 to $33.90; the consensus target price is about $29.70.

TUESDAY, MAY 22

Autozone Inc. (NYSE: AZO) took it hard on the chin recently when rival Advance Auto warned of a difficult second quarter. This is one of the high-priced stocks and shares are around $366 against a 52-week range of $266.25 to $399.10. The consensus analyst target price is $419.80; estimates are $6.25 EPS and $2.13 billion in revenue; next quarter estimates are $8.47 EPS and $2.84 billion in revenue.

Best Buy Co. Inc. (NYSE: BBY) is in such disarray that we won’t even bother with the warnings and the caveats here. Estimates are $0.60 EPS.

Dell Inc. (NASDAQ: DELL) is now trading at only about 7.5-times forward earnings. Estimates are $0.46 EPS and $14.89 billion in sales. Earnings have been choppy on guidance but the PC makers and components makers are all talking up the release of Windows 8 as a new catalyst. With shares trading just under $15.00, the 52-week range is $13.29 to $18.36 and the consensus price target is almost $19.50.

PetSmart Inc. (NASDAQ: PETM) has been a steady “beat earnings and raise guidance” outfit as Americans will pay endless and countless dollars on Fido and Fifi. Estimates are $0.73 EPS and $1.6 billion in revenue. With shares around $56.00, the 52-week high is $59.36.

Ralph Lauren Corporation (NYSE: RL) has sold off nearly $40 from its highs since March. The question is how its business has been holding up in slowing markets even if the U.S. sales have been strong. Estimates are $0.83 EPS and $1.6 billion in sales. With shares around $143 the 52-week range is $105.00 to $182.48 and the consensus price target from analysts is just over $190.00.

WEDNESDAY, MAY 23

Big Lots Inc. (NYSE: BIG) should be called “Warning Lots” because it has lowered guidance and been hard on two different waves. With shares under $35 and against a high of $47.22, the premium values of the dollar stores may and discounters may be hurting here. On the flip side, the bar has been set extremely low. Estimates are $0.69 EPS and $1.3 billion in revenue.

Hewlett-Packard Co. (NYSE: HPQ) is now around the $22 handle and the news of another 25,000 or more in layoffs (versus 350K as of October 31, 2011) is not helping the growth hopes. Estimates are $0.91 EPS and $29.92 billion in sales. The stock now trades at about 6-times earnings, but the consensus price target is down to just over $29.00 as no one wants to pay up for the valuation of this DJIA component.

NetApp Inc. (NASDAQ: NTAP) has been pounded and the last 45 days has looked like a downward staircase on its chart. At about $34.00, the 52-week range is $33.00 to $56.49 and the consensus price target objective is just over $47.00.

Pandora Media Inc. (NYSE: P) is no longer market-influencing, but it is a cult stock and the earnings could create a large gain or a large drop. With shares under $10.50, the post IPO range is $7.83 to $26.00. Estimates are -$0.17 EPS and $74.3 million in revenue. Can the company make it to profitability by the end of next year?

Toll Brothers Inc. (NYSE: TOL) is expected to be profitable. A profitable homebuilder! At $25.50, the 52-week range is $13.16 to $27.80. A lot of good news already has to be priced in, so we would want to expect upside to remain positive here. Estimates are $0.04 EPS and $381.9 million in revenue.

THURSDAY, MAY 24

Costco Wholesale Corporation (NASDAQ: COST) almost always beats its earnings estimates. At $83.75 the 52-week range is $70.22 to $92.10; analysts have a target price of $86.80 or so. Estimates are $0.87 EPS and $22.1 billion in revenue.

Tiffany & Co. (NYSE: TIF) has come off of its highs significantly and this is the king of jewelry stores for investors. There will have been two smaller reports ahead of Tiffany in the week with Fred’s and Zale. Estimates for Tiffany are $0.69 EPS and $816.8 million. With shares under $61.00, the 52-week range is $56.21 to $84.49 and the consensus price target is $75.63.

VeriFone Systems Inc. (NYSE: PAY) has pulled back by about 20% from its highs, but the woes of the company seem to be behind it. At $44.80, the 52-week range is $30.25 to $55.89 and the consensus analyst price target is $54.10. Estimates are $0.61 EPS and $471.5 million in revenue.

As a reminder, dates and estimates can change ahead of earnings and some may have already changed.

JON C. OGG

Filed under: Calendar, Earnings, The Week Tagged: AZO, BBY, BIG, COST, DELL, HPQ, NTAP, P, PAY, PETM, RL, TECD, TIF, TOL, URBN

The 8 Earnings Reports Shaping The Week Ahead (DNDN, EA, RAX, DIS, CSCO, M, NUAN)

Administrator — Fri, 04 May 2012 19:52:44 +0000

24/7 Wall St. often looks at the key earnings reports scheduled for the week ahead. We have the bulk of the S&P 500 earnings behind us and we are now starting to move to the off-calendar quarterly reports. This coming week we are focused on six key companies that are set to report earnings as the key to their sectors. This list may not seem like the most important companies to the broad market, but these will shape the outlook for other companies reporting in the week.

The top earnings we are looking at are as follows: Dendreon Corporation (NASDAQ: DNDN); Electronic Arts Inc. (NASDAQ: EA); Rackspace Hosting Inc. (NYSE: RAX); The Walt Disney Co. (NYSE: DIS); Cisco Systems, Inc. (NASDAQ: CSCO); Macy’s Inc. (NYSE: M); Priceline.com Incorporated (NASDAQ: PCLN); and Nuance Communications Inc. (NASDAQ: NUAN).

We have taken estimates and price targets from Thomson Reuters consensus estimates and have added in color on each.

The shape of the biotech sector is likely to hinge based on the earnings of Dendreon Corporation (NASDAQ: DNDN). VIVUS Inc. (NASDAQ: VVUS) also reports on Monday but Dendreon has many things that biotech investors want: a product on the market, a controversial story, a stock way off its post-approval highs, a history of soft sales with the promise of better times ahead, and a rather large short interest. This is a sales story rather than an earnings story: Thomson Reuters expects sales of $81.2 million for the last quarter, $90.1 million for the quarter ahead (the quarter we are in now, and $378.3 million in 2012. These sales are all from Provenge for late-stage prostate cancer. This is the one that will set the tone for biotech during the week and this stock is back down closer to $11 after having popped to $15 from $8 earlier this year.

Electronic Arts Inc. (NASDAQ: EA) is no longer the leading game company for investors, but it is one of the largest game makers in the world. Its earnings are also ahead of the larger video game giant Activision Blizzard Inc. (NASDAQ: ATVI) which reports later in the week. This is also considered one of the throw-away quarters of the video game sector. Thomson Reuters expects E.A. to report $0.17 EPS on $959.56 million in sales, with next quarter expected to be -$0.32 EPS on $580.9 million in sales. This will mark the year-end report and the growth in the year ahead is expected to go to $1.13 EPS from $0.84 EPS expected and sales are expected to grow to $4.5 billion from $4.17 billion expected.

Filed under: Calendar, Earnings, The Week Tagged: AAPL, ALU, ATVI, CSCO, DIS, DNDN, EA, JNPR, JWN, M, NUAN, NWSA, RAX, VVUS

24/7 Wall St. Top Analyst Upgrades & Downgrades Of The Week

Administrator — Sat, 28 Apr 2012 11:01:49 +0000

This last week had many top analyst calls, but each week we review all of the calls looking for those which were very bold calls or that go against the grain. These make up the Top Analyst Calls of the Week.

The standout research calls this last week were in the following stocks: ABB Ltd. (NYSE: ABB); Allison Transmission Holdings, Inc. (NYSE: ALSN); Amazon.com Inc. (NASDAQ: AMZN); Apple Inc. (NASDAQ: AAPL); CafePress Inc. (NASDAQ: PRSS); Chipotle Mexican Grill, Inc. (NYSE: CMG); Demandware, Inc. (NYSE: DWRE); Hess Corporation (NYSE: HES); Infosys Ltd. (NASDAQ: INFY); McDonald’s Corporation (NYSE: MCD); SanDisk Corporation (NASDAQ: SNDK); Wal-Mart Stores Inc. (NYSE: WMT); Zynga, Inc. (NASDAQ: ZNGA); Seagate Technology PLC (NASDAQ: STX); Western Digital Corporation (NYSE: WDC); Banco Santander (NYSE: STD); and Banco Bilbao Vizcaya Argentaria, S.A. (NYSE: BBVA).

We have outlined a summary of each call and added in color on each to show why (and if) the analysts made calls worth watching.

ABB Ltd. (NYSE: ABB) is about to see a drop due to its ex-dividend date and we saw two simultaneous downgrades after an acquisition strategy was outlined this last week. On Thursday ABB shares were downgraded to Neutral at JPMorgan and they were also removed from he coveted Conviction Buy List but maintained as a ‘Buy’ over at Goldman Sachs. This one lost about 5% from earlier in the week by the time Friday’s close came around.

Allison Transmission Holdings, Inc. (NYSE: ALSN) saw its quiet period end on Tuesday. Shares recovered on Friday due to stronger numbers elsewhere but the stock had been weak after the coverage started. We saw the following initiations: Started as Outperform at Baird; Started as Neutral at Citigroup; Started as Neutral at Credit Suisse; Started as Neutral at Goldman Sachs; Started as Neutral at J.P. Morgan; and Started as Hold at KeyBanc Capital Markets.

Amazon.com Inc. (NASDAQ: AMZN) was a Johnny Come-Lately call where several analysts decided all at once that they had to upgrade the online retail giant after it blew out its earnings: Raised to Buy at BofA/ML; Raised to Buy at Goldman Sachs; Raised to Buy at Nomura; Raised to Buy at SunTrust Robinson Humphrey.

Apple Inc. (NASDAQ: AAPL) blew the door off the hinges this last week with earnings. While it was already rated and effective buy rating, the new street-high official target is $1,111 and that will make it the first company worth more than $1 trillion by market cap if it comes true. This newest street-high call came from Topeka Capital Markets’ Brian White this last Wednesday.

CafePress Inc. (NASDAQ: PRSS) saw its quiet period end this last week and these are the calls we saw for analyst initiations: Started as Buy at Janney; Started as Outperform at Raymond James; and Started as Overweight at J.P. Morgan. The initiations being positive did not help the shares.

Filed under: Analyst Calls, The Week Tagged: AAPL, ABB, ALSN, AMZN, BBVA, CMG, DWRE, HES, INFY, MCD, PRSS, SNDK, STD, STX, WDC, WMT, ZNGA

24/7 Wall St. Top Dividend Stories of the Week

Administrator — Sat, 28 Apr 2012 11:01:00 +0000

This was a huge week in dividends, particularly for the key DJIA components. We had a report calling for more and more dividend hikes of about 8% from the DJIA components in 2012. As it turns out, this week already started proving that as truth but the dividend hikes are coming on much stronger than the report was calling for. We also evaluated a “Sell in May and go away” theme to see if it was going to happen this year and this new wave of dividend hikes might be one more minimizing factor that prevents the May sell-off in 2012 compared to 2011 and 2010. The key dividend hikes were many, but we saw a serious move from Dow Jones Industrial Average components hiking their payouts.

Johnson & Johnson (NYSE: JNJ) is playing catch-up to other DJIA healthcare players and the new yield is closer to 3.8%. Call this the 50th consecutive year of dividend hikes.

Wednesday was a very different day in Big Oil. Exxon Mobil Corporation (NYSE: XOM) went ahead and raised its dividend to catch its yield up to Chevron Corporation (NYSE: CVX). Something strange happened along the way: Chevron went ahead and raised its dividend much sooner than expected… and on the same day! FULL STORY

The Coca-Cola Company (NYSE: KO) tried something new, or old. It went back to the 1990s by announcing a stock split for the first time in well over a decade.

International Business Machines Corporation (NYSE: IBM) lifted its payout by 13% and showed why it may still rise to $230 over the next year.

From the Department of It’s About Time… The NASDAQ OMX Group, Inc. (NASDAQ: NDAQ) finally decided to do the right thing by initiating its first-ever dividend.

Investors rely heavily on utilities now for the high dividend yields of 5% or so. In fact, utility stocks are the new CDs for safe income investors. We saw two very different takes on the outlook for utilities and their dividends ahead. This one hits American Electric Power Co., Inc. (NYSE: AEP) and several other key utilities.

Enjoy the rest of your weekend!

JON C. OGG

Filed under: Corporate Governance, Dividend, Shareholder Issues, Stock Splits, The Week Tagged: AEP, CVX, IBM, JNJ, KO, NDAQ, XOM

The Top Earnings Previews For The Week Ahead (NYX, ACI, ADM, BRCM, CHK, SIRI, VLO, AWK, NLY, CMCSA, FSLR, GRMN, HIG, MA, SYMC, V, WFM)

Administrator — Fri, 27 Apr 2012 16:01:24 +0000

Earnings season is in full swing and the coming week is going to be extremely active with big earnings reports. 24/7 Wall St. has tried to preview several top earnings for the week ahead.

NYSE Euronext, Inc. (NYSE: NYX) is on Monday and the following earnings reports are due on Tuesday: Arch Coal Inc. (NYSE: ACI); Archer Daniels Midland Co. (NYSE: ADM); Broadcom Corporation (NASDAQ: BRCM); Chesapeake Energy Corporation (NYSE: CHK); Sirius XM Radio Inc. (NASDAQ: SIRI); Valero Energy Corporation (NYSE: VLO).

Wednesday’s top earnings reports on deck are as follows: American Water Works Co. (NYSE: AWK); Annaly Capital Management Inc. (NYSE: NLY); Comcast Corporation (NASDAQ: CMCSA); First Solar Inc. (NASDAQ: FSLR); Garmin Ltd. (NASDAQ: GRMN); Hartford Financial Services Group Inc. (NYSE: HIG); MasterCard Inc. (NYSE: MA); Symantec Corporation (NASDAQ: SYMC); Visa Inc. (NYSE: V); and Whole Foods Market Inc. (NASDAQ: WFM).

We will provide previews for the larger report due on Thursday as the reports get closer. As a reminder, some of the dates and estimates may change and some of them may have already changed. Consensus estimates are from Thomson Reuters and we have provided color on each if applicable.

NYSE Euronext (NYSE: NYX) reports on Monday. The consensus estimates are $0.48 EPS and $611.1 million in revenues. Shares are around $27.00, and the consensus analyst price target is $32.30. Now that the German merger (the German takeover of America’s top exchange) is off the table, investors are focusing on the values here.

TUESDAY, May 1

Arch Coal Inc. (NYSE: ACI) is due Tuesday morning and its shares have been battered along with the entire coal sector. Estimates are $0.16 EPS and $1.12 billion in revenues. Shares are around $9.50, and the consensus analyst price target is $32.30.

Archer Daniels Midland Co. (NYSE: ADM) is due Tuesday morning and estimates are $0.59 EPS and $21.4 billion in revenues. Shares are around $31.00, and the consensus analyst price target is almost $34.00.

Broadcom Corporation (NASDAQ: BRCM) reports after the close on Tuesday and it has been riding the Apple wave. The consensus estimates are $0.55 EPS and $1.8 billion in revenues. Shares are around $36.30 and the consensus analyst price target is $42.40.

Filed under: Calendar, Earnings, The Week Tagged: ACI, ADM, AWK, BRCM, CHK, CMCSA, FSLR, GRMN, HIG, MA, NLY, NYX, SIRI, SYMC, V, VLO, WFM

Top Earnings Previews For Early In The Week Ahead (COP, ILMN, NFLX, TXN, AMGN, AAPL, T, BIDU, COH, JNPR, MMM, RF, X, UTX)

Administrator — Fri, 20 Apr 2012 18:35:20 +0000

Earnings season is in full swing and we have many key reports due in the coming week. 24/7 Wall St. has provided some detailed previews for the key earnings reports we expect to show in detail on Monday and Tuesday.

We are monitoring earnings reports from the following companies for Monday and Tuesday: ConocoPhillips (NYSE: COP); Illumina Inc. (NASDAQ: ILMN); Netflix, Inc. (NASDAQ: NFLX); Texas Instruments Inc. (NASDAQ: TXN); Amgen Inc. (NASDAQ: AMGN); Apple Inc. (NASDAQ: AAPL); AT&T Inc. (NYSE: T); Baidu Inc. (NASDAQ: BIDU); Coach Inc. (NYSE: COH); Juniper Networks Inc. (NYSE: JNPR); 3M Co. (NYSE: MMM); Regions Financial Corporation (NYSE: RF); United States Steel Corporation (NYSE: X); and United Technologies Corporation (NYSE: UTX).

More earnings report previews will come on Sunday or Monday for the reports due on Wednesday, Thursday, and Friday. Consensus estimates and price targets are from Thomson Reuters. Color has been on added on each if applicable.

MONDAY, April 23

ConocoPhillips (NYSE: COP) is set to report Monday morning and the break-up is going to make any real apples to apples comparison difficult to interpret. Thomson Reuters has estimates of $2.07 EPS. Shares are trading around $73.15 and the 52-week range is $58.65 to $81.50; Thomson Reuters had a consensus target as of Friday of $81.05.

Illumina Inc. (NASDAQ: ILMN) is no market mover with a $5.4 billion market cap, but it is a recent merger candidate even if that appears to be off the table. Earnings estimates are $0.32 EPS and $263.6 million. Shares are trading around $44.00 and the 52-week range is $25.57 to $79.40; Thomson Reuters had a consensus target as of Friday of $52.71.

Filed under: Calendar, Earnings, The Week Tagged: AAPL, AMGN, BIDU, COH, COP, ILMN, JNPR, MMM, NFLX, RF, T, TXN, UTX, X

The Top 10 Earnings Remaining This Week (INTC, IBM, JNJ, KO, BAC, MSFT, VZ, AEP, GE, MCD)

Administrator — Mon, 16 Apr 2012 16:30:37 +0000

Last week may have been the official start of earnings season, but this week is when the real floodgates for earnings reports will open wide. Citigroup Inc. (NYSE: C) has already reported earnings and we have already given previews for the Dow Jones Industrial Average components with twelve or thirteen components reporting earnings this week alone.

The top ten earnings reports we are focusing on for the rest of this week are as follows: Intel Corporation (NASDAQ: INTC); International Business Machines Corporation (NYSE: IBM); Johnson & Johnson (NYSE: JNJ); The Coca-Cola Company (NYSE: KO); Bank of America Corporation (NYSE: BAC); Microsoft Corporation (NASDAQ: MSFT); Verizon Communications, Inc. (NYSE: VZ); American Electric Power Co. Inc. (NYSE: AEP); General Electric Co. (NYSE: GE); and McDonald’s Corporation (NYSE: MCD).

24/7 Wall St. has also highlighted four hot IPOs to watch late this week and we also highlighted the strongest stock charts in the S&P 500 Index. We have also given a scoring card for how earnings season is looking so far.

Tuesday, April 17

Intel Corporation (NASDAQ: INTC) reports on Tuesday after the close. The processor and chip giant just put in yet another multi-year high on Monday at $28.55 and it should be worth noting that Thomson Reuters has a consensus price target of only $28.38 currently. The company will likely have to do better than just meeting earnings estimates and guiding within the range of estimates. Thomson Reuters has estimates of $0.50 EPS and $12.84 billion in revenue.

International Business Machines Corporation (NYSE: IBM) is around $204.00 and is under a new CEO. We always watch the billions of backlog and its longer-term guidance. The current consensus is $208.10 and that pales in comparison to the recent $230 price target from one analyst. Thomson Reuters has estimates of $2.65 EPS and $24.77 billion in revenue.

Johnson & Johnson (NYSE: JNJ) remains with a fairly negative bias based upon product recalls on a never-ending basis. J&J’s price of about $64.00 compares to a year high of $68.05 and a Thomson Reuters consensus target of $71.88. Thomson Reuters has estimates of $1.35 EPS and $16.26 billion in revenue.

The Coca-Cola Company (NYSE: KO) is trading around $72.75 and is within about 2% of a year-high of $74.39. It remains a key defensive stock holding today and Thomson Reuters has a consensus price target of $76.54 on the name. Thomson Reuters consensus estimates are $0.88 EPS and $10.83 billion in sales.

Thursday, April 19

Bank of America Corporation (NYSE: BAC) is the fourth of the money-center banks to report and investors need to be reminded that shares doubled from trough to peak from December to March during the bank rally. Investors are not chasing book value here. The stock trades around $8.85 and Thomson Reuters has a consensus target of about $9.90. Thomson Reuters has estimates of $0.12 EPS and $22.51 billion in revenue.

Microsoft Corporation (NASDAQ: MSFT) is still within about 5% of a multi-year high ahead of the upcoming Windows O/S release. Shares are just under $31.00, its year-high is $32.95, and Thomson Reuters has a consensus price target of almost $34.00 per share. The consensus target from Thomson Reuters is $0.57 EPS on $17.16 billion in sales.

Verizon Communications, Inc. (NYSE: VZ) is likely not a market-mover any longer because it has a low volatility. What it does have is a monster dividend yield of about 5.4%. Its $37.30 price compares to a 52-week high of $40.48 and to a consensus price target of $39.55. Thomson Reuters has estimates of $0.57 EPS and $28.2 billion in revenue. Thomson Reuters has estimates of $0.57 EPS and $28.2 billion in revenue. This will possibly be considered as the first look to see what Apple’s iPhone and iPad sales have been.

Friday, April 20

American Electric Power Co. Inc. (NYSE: AEP) reports on Friday morning and every dividend investor is going to need to pay close attention here to see how it affects the entire utility sector. At $37.50, the 52-week range is $33.09 to $41.98 and Thomson Reuters has a consensus target of $41.72. The consensus targets are $0.80 EPS and $3.73 billion. What matters here is that many plant closures for power generation are in the process of being closed due to them being coal-fired and it could skew guidance.

General Electric Co. (NYSE: GE) is still under $19.00 versus a year high of $21.00; the consensus target is still up just above $22.25. After raising its dividend twice and after saying its financial outfit is doing better and better, investors are going to be paying close attention here to the biggest conglomerate. Thomson Reuters has estimates of $0.33 EPS and $34.66 billion in revenue.

McDonald’s Corporation (NYSE: MCD) has lost its luster after being the best performing DJIA stock, it has a new CEO taking over, and it has already lowered the bar for what had been extensive and successive same-store sales growth. At $96.50, the 52-week high is $102.22 and the consensus price target is almost $107.00. Thomson Reuters has estimates of $1.23 EPS and $6.54 billion in revenue.

Be advised that the dates may change and the earnings estimates usually change marginally each day or each week as analysts adjust their targets before earnings reports. If you wish to sign up for our free daily email, sign up in the green box below. We send daily notices on feature stories, analyst upgrades and downgrades, market rumors, hot IPOs and secondary offerings and more.

JON C. OGG

Filed under: Calendar, Earnings, Economy, Technology Companies, The Week Tagged: AEP, BAC, C, GE, IBM, INTC, JNJ, KO, MCD, MSFT, VZ

Scoring Earnings Season: A True Tale of the Tape (AA, JPM, WFC, GOOG, NOK, INFY, CSTR, MFRM, CSC)

Administrator — Sat, 14 Apr 2012 15:33:10 +0000

Earnings season for the first quarter of 2012 is upon us and 24/7 Wall St. wanted to see how the tale of the tape is treating the companies reporting earnings. Our aim is to offer some insight into a ‘earnings season bias.’ We have featured a preview of 13 of the 30 DJIA stocks which report earnings in the coming week and the common singularity in the lot shows that analysts think most of these stocks are close to full value.

In a separate issue to rank last week’s bias, we just featured the strongest stock charts in the S&P 500 Index after a poor week where the S&P fell by -1.9%. We already showed a tempering of expectations going into earnings season, so the reactions were not really any huge surprise.

Can you derive a true earnings season bias by evaluating the post-earnings reactions of Alcoa Inc. (NYSE: AA), J.P. Morgan Chase & Co. (NYSE: JPM), Wells Fargo & Co. (NYSE: WFC), Google Inc. (NASDAQ: GOOG), Nokia Corporation (NYSE: NOK), Infosys Ltd. (NASDAQ: INFY), Coinstar, Inc. (NASDAQ: CSTR), Mattress Firm Holding Corp. (NASDAQ: MFRM), and Computer Sciences Corporation (NYSE: CSC)? 24/7 Wall St. thinks you can find a key trend here that may help investors cover their assets this earnings season. Hopefully this review and analysis will help investors focus on the underlying issues of each major earnings report rather than getting hung up on whether just over 8% GDP growth in China is good enough and whether the PIIGS in Europe are going to keep dragging down Europe and the rest of the world.

Alcoa Inc. (NYSE: AA) managed to surprise just about everyone to the upside. When it had just announced production cuts a week before, the aluminum giant managed to turn in a positive earnings report at $0.10 EPS rather than a loss of -$0.04 EPS expected. The conference call talked up growth in many key segments and said that China is not as weak as it looks. Alcoa went from $9.32 before earnings to close at $9.90 the day after and even closed at $10.17 the following day before closing the week out at $9.85. All in all, Alcoa added 2.3% for the week.

There was a big earnings reaction disappointment from J.P. Morgan Chase & Co. (NYSE: JPM) and from Wells Fargo & Co. (NYSE: WFC). These are the two healthiest banks and it really sets up caution for the coming junk-bank earnings from the money center group this coming week. Both companies beat earnings and talked up their books and finances. At the end of the day, J.P. Morgan closed down 3.6% and Wells Fargo closed down almost 3.5% after earnings. We would pay closer attention to the book value analysis for the major financial sector earnings due this week because the sector was a great performer in the first quarter and looks to be treated rather poorly even after good earnings.

The Internet wild card was of course Google Inc. (NASDAQ: GOOG) and the earnings were clouded by a stock split that is actually a share structure shenanigan giving Larry & Sergei ultimate and complete control of the company. The focus remains on the decline in pay-per-clicks as well, and shares fell 4% or $26.41 to $624.60 after the earnings report. This was a drop of less than $8.00 for the whole week.

It should be of little surprise that Nokia Corporation (NYSE: NOK) issued an earnings warning. We do not even count Nokia as a market indicator any longer and this posted a double-digit drop after warnings and then weakened further the rest of the week. Shares are down at $4.02 now and at the weakest level in a decade. Ask yourself this question… Do you even know anyone that still has a Nokia phone?

Infosys Ltd. (NASDAQ: INFY) is supposed to be the king of Indian IT-outsourcing, and the earnings report itself did not look bad. The problem came from cutting its growth rates by one-third for the coming year and that spooked investors big time with a drop of 13.4% to $49.15 at the end of the week. Infosys is now within striking distance of a 52-week low of $46.12.

One positive did come from Coinstar, Inc. (NASDAQ: CSTR) with much higher guidance. Shares rose 7.3% to $65.78 and the stock put in a new 52-week high of $69.74 before softening up with the weak stock market tape. The bright side here was no negative reaction from a price hike. Go figure. Unfortunately, it was hard to draw any major inference here into other media and movie companies.

Another bright spot came from Mattress Firm Holding Corp. (NASDAQ: MFRM) with higher earnings guidance and an acquisition which will boost its market share in the mattress sales segment. Shares hit a new post-IPO and all-time high of $45.96 and this one gained almost 13% for the week. Unfortunately it is going to be hard to draw much pin-action here for other retail names.

Computer Sciences Corporation (NYSE: CSC) put a hex on its turnaround story as this key contract in the U.K. is still held up and is not finalized for better or worse. The earnings warning turned a value stock back into a value trap. CSC closed down almost 8% for the week at $27.02 and it is a weak stock that got weaker.

So, the vote is in if you just look at the broad market reaction on each and filter out all of the other noise. The long and short of the matter is that if you look at the core economy companies here and filter out the few bright spots, Wall Street is not really wanting to pay up for what appear to be decent earnings. After a huge first quarter, it seems as though the bias is leaning toward only rewarding companies which really exceed expectations. Now we know what to be braced for going into the coming week as the real earnings season floodgates open wide.

You are invited to join or free daily email list to hear about upcoming earnings trends, market trends, IPOs, market rumors, M&A, private equity, and also to get our daily feature stories delivered right to your inbox each morning.

JON C. OGG

Filed under: Annual Report, Banking, Corporate Governance, Dividend, Earnings, Earnings Warning, Economy, Editor's Picks, Index, The Week, Trading Alert, Value Investing Tagged: AA, CSC, CSTR, GOOG, INFY, JPM, MFRM, NOK, WFC

The Strongest Charts In The S&P 500 (AZO, CMG, HD, INTC, ISRG, PM, RHT, SRE, UNH, WFM)

Administrator — Sat, 14 Apr 2012 14:24:25 +0000

24/7 Wall St. has partnered with The Chart Lab to feature the standout names in the S&P 500 over the last week. This weekend’s chart represents the strongest names in the S&P 500 as the close of Friday April the 13th based on the www.chartlabpro.com proprietary statistical and technical algorithm.

The following stocks have exhibited the strongest chart patterns: AutoZone Inc. (AZO); Chipotle Mexican Grill, Inc. (NYSE: CMG); The Home Depot, Inc. (NYSE: HD); Intel Corporation (NASDAQ: INTC); Intuitive Surgical, Inc. (NASDAQ: ISRG); Philip Morris International, Inc. (NYSE: PM); Red Hat, Inc. (NYSE: RHT); Sempra Energy (NYSE: SRE); Unitedhealth Group, Inc. (NYSE: UNH); and Whole Foods Market, Inc. (NASDAQ: WFM).

These names year to date have outperformed the S&P 500 by 12.92%. During the month of April these particular stocks have risen an average of 0.66% while the S&P 500 has actually fallen by a rate of -3.31%.

As always, past performance is not indicative of future results. These results for the strongest names are updated daily and stronger names do rotate daily into the composite of the top 10.

Currently the 10 stocks featured this week are not technically overbought, but they are approaching a overbought condition according to the methodology used by the Chartlabpro.com model.

The methodology from chartlabpro.com shows that a 5 rating is considered a Strong Buy and conversely a 1 is a Strong Sell. As a reminder, Chipotle, Intel, Philip Morris International, and Unitedhealth Group are due to report quarterly earnings in the coming days.

Featured exclusively for 24/7 Wall St. by ChartLabPro.com.

Filed under: Charts, Technical Analysis, The Week Tagged: AZO, CMG, HD, INTC, ISRG, PM, RHT, SRE, UNH, WFM

Top DJIA Earnings Previews For The Week Ahead (C, INTC, IBM, JNJ, KO, AXP, BAC, DD, MSFT, TRV, VZ, GE, MCD)

Administrator — Fri, 13 Apr 2012 17:10:22 +0000

Earnings season may be underway, but this coming week is going to be full of many key earnings reports. We actually have a full slate on deck with what appears to be 13 of the 30 DJIA components set to report earnings.

24/7 Wall St. has prepared previews on each of the 13 DJIA components as follows: Citigroup Inc. (NYSE: C); Intel Corporation (NASDAQ: INTC); International Business Machines Corporation (NYSE: IBM); Johnson & Johnson (NYSE: JNJ); The Coca-Cola Company (NYSE: KO); American Express Co. (NYSE: AXP); Bank of America Corporation (NYSE: BAC); E. I. du Pont de Nemours and Co. (NYSE: DD); Microsoft Corporation (NASDAQ: MSFT); Travelers Companies Inc. (NYSE: TRV); Verizon Communications, Inc. (NYSE: VZ); General Electric Co. (NYSE: GE); and McDonald’s Corporation (NYSE: MCD).

We have used Thomson Reuters consensus data, shown the current price and the target prices, and added in color on each if applicable.

Monday, April 16

Citigroup Inc. (NYSE: C) is due to report Monday morning and is the third money center bank to report. It was not allowed to boost its dividend. It seems as though “The Prince” may get more vocal for Citi to get to pay a higher dividend. This is at a substantial discount to its tangible book value. Thomson Reuters has estimates of $1.00 EPS and $19.85 billion in revenue.

Tuesday, April 17

Intel Corporation (NASDAQ: INTC) is up against multi-year highs with shares around $28.30 and it should be worth noting that the consensus price target from Thomson Reuters is currently at the market with a value of $28.33. Thomson Reuters has estimates of $0.50 EPS and $12.8 billion in revenue.

International Business Machines Corporation (NYSE: IBM) has a new CEO and has still been trying to fire on all cylinders while other IT-outfits have suffered. We will be watching the billions of backlog and its longer-term guidance. With shares around $204 it the current consensus of $207.35 pales in comparison to the street-high target of $230 we saw this last quarter. Thomson Reuters has estimates of $2.65 EPS and $24.77 billion in revenue.

Johnson & Johnson (NYSE: JNJ) continues to be under a cloud of recalls and at $63.50 this is down about 6% from its 52-week high now. The consensus price target is currently almost $72.00 per share. Thomson Reuters has estimates of $1.35 EPS and $16.26 billion in revenue.

The Coca-Cola Company (NYSE: KO) remains a defensive play as the market moves back and forth between risk and safety. At $72.20, the stock is barely down $2 from its 52-week high and the Thomson Reuters consensus price target is $76.75 and the consensus estimates are $0.88 EPS and $10.83 billion in sales.

Filed under: Calendar, Earnings, Economy, Editor's Picks, The Week Tagged: AXP, BAC, C, DD, GE, IBM, INTC, JNJ, KO, MCD, MSFT, TRV, VZ